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OPEC Bigwigs Opt for June Meeting; Oil Rises Watching India

CommoditiesApr 27, 2021 03:51PM ET
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© Reuters.

(* Updates with settlement prices)

By Barani Krishnan

Investing.com - The ministers controlling the OPEC+ oil cartel pushed forth a two-day meeting scheduled this week to June, leaving intact a decision to ease production cuts despite the Covid catastrophe in India, the third-largest crude importer.

Crude prices rose, rebounding from Monday’s drop, as traders kept a close watch on the global pandemic situation, including in Japan, the fourth-largest oil buyer, which has declared a state of emergency amid preparations for the Tokyo Olympics that is to begin in 87 days.

Ministers of OPEC+ were originally supposed to hold Zoom conferences on Tuesday and Wednesday to further discuss plans made on April 1 to ease production cuts. 

But the meeting was postponed at the 11th hour, with  Russian Deputy Prime Minister Alexander Novak, the second most powerful person in the oil cartel, saying it will now be held at the start of June.

“On June 1st, the OPEC+ ministerial meeting will take effect,” Novak said in a comment carried by Reuters. “In July and August, we will consider output volumes.”

New York-traded West Texas Intermediate, the benchmark for U.S. crude, settled up $1.03, or 1.7%, at $62.94.


London-traded Brent, the global benchmark for crude, gained 84 cents, or 1.3%, to settle at $65.87.

While oil was clawing losses from recent sessions, "gains are likely to remain capped as the Covid crisis continues,” said Sophie Griffiths, who heads research for U.K. and EMEA at online broker OANDA.

India, home to the world's worst ongoing coronavirus outbreak, has reported more than 17.6 million cases since the pandemic began last year, making it second worst infected country after the United States, which has some 32 million cases so far. But  India’s real Covid caseload could be 30 times higher -- meaning more than half a billion cases — experts told CNN.

Despite the alarming situation in the world’s third largest oil consumer, OPEC+’s Novak said crude prices are “in a good place, and demand is increasing”.

“The global oil market is seeing a rebound in production and mobility,” he said. “Oil rates are expected to remain steady before the end of the year.” 

The 23-member OPEC+ comprises the original 13 members of OPEC, or the Saudi-led Organization of the Petroleum Exporting Countries, and 10 other oil producing nations steered by Russia. 

The group announced early this month its first meaningful production hike in a year, after withholding at least 7 million barrels per day in output since April 2020.

OPEC+ said it will pump an additional 350,000 barrels per day in May and June, and a further 400,000 barrels daily in July.

Oil prices fell to a historic minus $40 per barrel in April 2020 at the height of the demand destruction caused by the Covid-19. Production cuts since then by OPEC+ helped the market recover, with the rebound particularly accelerating after vaccine breakthroughs in November.

An OPEC+ joint technical committee that met on Monday envisioned the oil glut built up the height of the pandemic almost gone by the end of the second quarter — despite the Covid situations in India and Japan.

The committee saw oil supplies declining by 1.2 million barrels a day and demand rising by 6 million barrels daily in 2021, the reports said.

OPEC Bigwigs Opt for June Meeting; Oil Rises Watching India
 

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Comments (5)
JonMichael Patrick
JonMichael Patrick Apr 27, 2021 5:54PM ET
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noone cares about india. they out 600 ppl on one small bus for christ sakes. meanwhile Americans in Florida all take seperate v8 pickups.... up up up. also India is the most polluted country in the world. wish the usa would ditch that alliance... literally stinks
Barani Krishnan
Barani Krishnan Apr 27, 2021 5:54PM ET
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PEEG. JohnMichaelPatrick ... that's the word that got axed out.
SunilKumar Dixit
SunilKumarDixit Apr 27, 2021 5:54PM ET
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JonMichael Patrick. I am sure you are not an American. Americans will never write against India. India and America share common interests and treasure a close bonding of friendship. World's oldest democracy and world's largest democracy. Both have been victims of Islamic terror. Both have been victims of Chinese Wuhan virus conspiracy. And fit it in your mind, if you have any, it's a new India and now India does matter. Our saints performed surgeries when people on many other continents didn't have a cloth on body. There were universities of Nalanda and Taxila with students from across the world when many other continents didn't know ABCD. There was Viman Shastra for avionics and Puspak hypersonic aircraft when the Wright Brothers were not born. There were Brahmastra, Narayanastra and Pashupatastra when the nukes and WMDs were not invented. Gain some knowledge. It will help. My intention is not to insult you but to put you in correct path.
Barani Krishnan
Barani Krishnan Apr 27, 2021 5:54PM ET
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SunilKumar Dixit  I have come across all sorts of racist rants on this platform. JonMichael Patrick's is by far one of the worst, if not the worst. Being IQ-challenged exacerbates his problem, I guess.
Ernest Wong CA
Ernest Wong CA Apr 27, 2021 5:00PM ET
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In May Brent may fall but I'll say it's a correction rather than a plunge due to the worst scenario (India and Japan) has already been priced in. Having said this I don't expect that the price will shoot thru the ceiling say $80 either. I just totally absolutely no idea how Goldman Sachs "pitched/lured" you guys to go long when the price hit $70. LMAO
Barani Krishnan
Barani Krishnan Apr 27, 2021 5:00PM ET
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Goldman's gift: To lie without batting an eyelid :)
Barani Krishnan
Barani Krishnan Apr 27, 2021 5:00PM ET
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Have you forgotten subprime? Or Blankfein's lies about the Malaysia mess?
Gopal Kundu
Gopal Kundu Apr 27, 2021 2:37PM ET
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Wti
Gopal Kundu
Gopal Kundu Apr 27, 2021 2:37PM ET
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Crude tomorrow @65$
Matt Voo
OilTrader007 Apr 27, 2021 11:41AM ET
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so oil will go down again. If not today then tomorrow.
Barani Krishnan
Barani Krishnan Apr 27, 2021 11:41AM ET
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Wouldn't be surprised. India case-counts are just exploding.
 
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